ethical fund

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Ethical fund

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Ethical Fund

A mutual fund in which the asset managers make investment decisions based upon some ethical code. An ethical fund is marketed to investors who may have moral objections to certain investment vehicles or companies. For example, an individual may have a moral objection to smoking and may therefore buy shares in a mutual fund that refrains from investing in tobacco companies. Ethical funds may have positive or negative guidelines; that is, a fund's ethics may inform where it makes investments (e.g. in environmentally friendly companies) and where it does not (e.g. in arms manufacturers). See also: Green fund, Islamic finance.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

ethical fund

A mutual fund that limits investment alternatives to securities of firms meeting certain social standards. For example, an ethical fund might exclude securities of companies that are known to practice discrimination, that operate in certain countries, or that produce specific products (for example, those having to do with nuclear weapons or nuclear power plants). Ethical funds include the Dreyfus Third Century Fund, the New Alternatives Funds, and the Working Assets Fund, among others. See also social investing.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
"Appetite for socially responsible funds is increasing, as is the number of people turning away from meat, he says, pointing to a report from GlobalData showing a 600% increase in vegans in the U.S.
These are followed by balanced funds (70.0%), money market funds (59.8%), stable value funds (57.5%), target-risk funds (41.7%), professionally managed accounts (34.0%), real estate/real estate investment trusts (REITs) (27.8%), socially responsible funds (11.8%), employer risk funds (6.5%) and alternative investments (5.1%).
The list of climate sinners is longer at Parnassus Investments and Green Century Capital Management, two specialists in so-called socially responsible funds. Both the Parnassus Fund and Parnassus Endeavor avoid companies involved in exploration, extraction, production, manufacturing or refining of fossil fuels.
The Performance of European Socially Responsible Funds. Journal of Business Ethics, 87(4), 573-588.
Islamic funds screen their portfolios according to religious guidelines such as bans on tobacco, alcohol and gambling, similar to socially responsible funds in Western markets.
The financial performance of socially responsible funds provides a partial answer to the question of whether ethical standards are inconsistent with the wealth maximization paradigm used in mainstream finance.
Islamic fund managers screen their portfolios according to religious guidelines such as bans on tobacco, alcohol and gambling, in much the same way as socially responsible funds.
We also commend TI-CREF for taking this important step to disassociate this harmful corporation from its Social Choice Funds and call on all socially responsible funds to do the same." Committee to Defend the Boston School Bus 5 USW Local 8751, "The Committee to Defend the Boston School Bus 5 is gratified that TI-CREF and other funds are divesting from the Veolia Corporation.
investors (such as hedge funds and private equity funds) that utilize ESG factors in their selection criteria, there are many opportunities for individual investors to find suitable socially responsible funds. Among some of the more popular options:
TYPICALLY, WHEN investors think of socially responsible funds, they think of windmills, herbal tea and other do-good investments that sacrifice return for values-driven goals.

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